U.S. Stocks May Give Back Ground After Yesterday’s Rally

Following the strong upward move seen over the course of the previous session, stocks are likely to move back to the downside in early trading on Friday. The major index futures are currently pointing to a lower open for the markets, with the Dow futures down by 180 points.

Traders may look to cash in on yesterday’s strong gains, as stronger than expected jobs data offsets the faint hopes that the Federal Reserve might slow its planned pace of interest rate hikes.

The Labor Department’s closely watched monthly employment report showed job growth in the U.S. exceeded economist estimates in the month of May.

The report showed non-farm payroll employment jumped by 390,000 jobs in May after surging by an upwardly revised 436,000 jobs in April.

Economists had expected employment to increase by about 325,000 jobs compared to the addition of 428,000 jobs originally reported for the previous month.

Meanwhile, the Labor Department said the unemployment rate remained unchanged at 3.6 percent. The unemployment rate was expected to edge down to 3.5 percent.

Shortly after the start of trading, the Institute for Supply Management is scheduled to release its report on service sector activity in the month of May.

The ISM’s services PMI is expected to edge down to 56.4 in May from 57.1 in April, although a reading above 50 would still indicate growth.

With traders shrugging off lower guidance from software giant Microsoft (MSFT), stocks showed a substantial turnaround over the course of the trading session on Thursday. The major averages recovered from early weakness to end the day sharply higher.

The major averages saw further upside going into the close, ending the session at their best levels of the day. The Dow jumped 435.05 points or 1.3 percent to 33,248.28, the Nasdaq spiked 322.44 points or 2.7 percent to 12,316.90 and the S&P 500 surged 75.59 points or 1.8 percent to 4,176.82.

The rally on the day more than offset the pullback seen over the two previous sessions, with the major averages reaching their best closing levels in almost a month.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Friday. Japan’s Nikkei 225 Index jumped by 1.3 percent and Australia’s S&P/ASX 200 Index advanced by 0.9 percent, while markets in China and Hong Kong were closed for a holiday.

European stocks have shown more modest moves to the upside on the day, with the U.K. markets still closed for the Queen’s Platinum Jubilee celebrations. The German DAX Index and the French CAC 40 Index are both up by 0.1 percent.

In commodities trading, crude oil futures are rising $0.59 to $117.46 a barrel after jumping $1.61 to $116.87 a barrel on Thursday. Meanwhile, after climbing $22.70 to $1,871.40 an ounce in the previous session, gold futures are falling $4.70 to $1,866.70 an ounce.

On the currency front, the U.S. dollar is trading at 130.58 yen versus the 129.84 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.0705 compared to yesterday’s $1.0747.

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